Certified Insurance Service Representative
(CISR) Agency Operations Exam Questions
and Answers with Complete Solutions
Describe actual authority - ANSWER>>when the agency is expressly
given the authority in the agency contract
Describe a contract - ANSWER>>Oral or written agreements between
two parties that creates an obligation to do or not do a particular thing
What are the four benefits of ethical behavior? - ANSWER>>To be
recognized as a knowledgeable insurance professional within the
community
To gain public trust and confidence
To avoid government regulation
To enhance credibility with customers and companies
What is the risk management process? - ANSWER>>Risk Identification
Risk analysis
Risk control
Risk finance
,Risk administration
Explain the five steps of risk management - ANSWER>>Risk
identification: identify the customers exposure to loss
Risk analysis: determine frequency or severity of the exposure. How
much could a loss actually cost the customer
Risk control: understand what methods can be implemented to
eliminate or reduce cost associated with exposure
Risk finance: fund losses by user either internal or external dollars
Risk administration: Implement and monitor the customers risk
management program
Stakeholders - ANSWER>>People who have the potential to be affected
by any action taken by an organization. Any group or individual who is
affected by the achievements of a firm's objectives
Risk Control Methods - ANSWER>>Avoid: not always practical
Prevent: reduces frequency
Reduce: reduces severity
Segregation: includes separation or duplication
Transfer: can be physical transfer or contractual transfer
What is the difference between a broker and an agent/producer? -
ANSWER>>Brokers do not have binding authority
How would you best describe an agency stakeholder? - ANSWER>>The
primary stakeholders are any group or individual who is affected by the
achievement of a firm's objective
, Which source of revenue is typically the largest source of income for an
insurance agency? - ANSWER>>Commission
What does a large number of locations mean for how an agency
operates? - ANSWER>>It may mean some features of the agency are
centralized
List the four major classes of exposure to loss - ANSWER>>Property
Human Resources
Liability
Net Income
What are the methods of identifying loss exposures? -
ANSWER>>Interview
Checklist
Physical inspection
Activity analysis
Document review
Advertising/website
Flow charts
Loss history
Financial statements
Why is insurance regulated? - ANSWER>>To protect the consumer
(CISR) Agency Operations Exam Questions
and Answers with Complete Solutions
Describe actual authority - ANSWER>>when the agency is expressly
given the authority in the agency contract
Describe a contract - ANSWER>>Oral or written agreements between
two parties that creates an obligation to do or not do a particular thing
What are the four benefits of ethical behavior? - ANSWER>>To be
recognized as a knowledgeable insurance professional within the
community
To gain public trust and confidence
To avoid government regulation
To enhance credibility with customers and companies
What is the risk management process? - ANSWER>>Risk Identification
Risk analysis
Risk control
Risk finance
,Risk administration
Explain the five steps of risk management - ANSWER>>Risk
identification: identify the customers exposure to loss
Risk analysis: determine frequency or severity of the exposure. How
much could a loss actually cost the customer
Risk control: understand what methods can be implemented to
eliminate or reduce cost associated with exposure
Risk finance: fund losses by user either internal or external dollars
Risk administration: Implement and monitor the customers risk
management program
Stakeholders - ANSWER>>People who have the potential to be affected
by any action taken by an organization. Any group or individual who is
affected by the achievements of a firm's objectives
Risk Control Methods - ANSWER>>Avoid: not always practical
Prevent: reduces frequency
Reduce: reduces severity
Segregation: includes separation or duplication
Transfer: can be physical transfer or contractual transfer
What is the difference between a broker and an agent/producer? -
ANSWER>>Brokers do not have binding authority
How would you best describe an agency stakeholder? - ANSWER>>The
primary stakeholders are any group or individual who is affected by the
achievement of a firm's objective
, Which source of revenue is typically the largest source of income for an
insurance agency? - ANSWER>>Commission
What does a large number of locations mean for how an agency
operates? - ANSWER>>It may mean some features of the agency are
centralized
List the four major classes of exposure to loss - ANSWER>>Property
Human Resources
Liability
Net Income
What are the methods of identifying loss exposures? -
ANSWER>>Interview
Checklist
Physical inspection
Activity analysis
Document review
Advertising/website
Flow charts
Loss history
Financial statements
Why is insurance regulated? - ANSWER>>To protect the consumer
